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Last Updated : Nov 30, 2018 08:34 AM IST | Source: Moneycontrol.com

Podcast | Stock picks of the day: Near-term resistance at 10,990–11,070 for Nifty

Level of 10780 – 10700 will act as an immediate support whereas on the higher side, 10990 – 11070 will be a near-term resistance for the index.

Moneycontrol Contributor @moneycontrolcom
 
 
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Aditya Agarwal

After taking a sharp U-turn during the second half of the trading session at the beginning of the week on Monday, Nifty saw a significant rally during the rest of the week.

Thursday’s trading session certainly proved the strong presence of bull as Nifty opened higher with a gap and saw mammoth buying interest throughout the session.

Close

In that optimism, the index convincingly closed above the daily 200-DMA & 89-EMA, respectively, which was earlier acting as a strong wall of resistance.

On daily charts, the 9-45 EMA has signaled positive crossover during Wednesday and the impact of such development seen on Thursday.

The daily Relative Strength Index (RSI) entered above 60 levels. Also, the unfilled gap formed on October 4, 2018 got filled during Thursday’s trading session.

At this juncture, Thursday’s high of 10,883.05 coincided with the 50% retracement of its entire fall from the top of 11,760.20 to the bottom of 10,004.55, hence possibility of some profit booking can’t be ruled out.

In that scenario, 10,780–10,700 will act as an immediate support whereas on the higher side, 10,990–11,070 will be a near-term resistance for the index.

Here is a list of top three stocks which could give 9-10% return in the next 1 month:

Dr Reddy’s Laboratories: Buy around 2650 – 2625| LTP: Rs 2652| Target: Rs 2900| Stop Loss: Rs 2520| Return 9%

After confirming its breakout from broad “Descending Triangle’ pattern, the stock consolidated in a range and formed a triangle pattern on the daily chart.

During the last week, the stock confirmed its breakout from symmetrical triangle pattern, however, the follow-up buying was missing, as a result, it saw minor pullback during the current week.

On Thursday, the stock resumed its up move and eventually ended at highest point post-July 27, 2017. The daily RSI (14) entered inside the 60 level which supports our hypothesis.

Hence, we believe that the impact of Descending Triangle pattern will be seen in the coming weeks; therefore, we recommend traders to buy this stock in the range of 2650 to 2625 with a price target of 2900 and a stop loss placed below 2520.

Berger Paints: Buy above 324| LTP: Rs 319| Target: Rs 350| Stop Loss: Rs 310| Return 10%

Berger Paints has an inverse relationship with Crude Oil which has corrected sharply in the past few weeks. The impact of such development was seen during the recent past in the counter.

Off late, the stock has consolidated in a range and the daily chart resembles a formation of ‘Bullish Pennant’. The breakout of the said pattern will be seen if the stock starts trading above 324.

In that case, the stock can retest its recent high of 350. On the lower side, the level of Rs 310 will be a good support and below that our long view will be negated and traders should exit from their long positions.

Century Textiles: Sell below Rs 889| LTP: Rs 894| Target: Rs 840 – 810| Stop Loss: Rs 927| Return 9.4%

Looking at the daily chart, the stock has seen a sharp rally from the bottom of around 718 and rallied till 927. Subsequently, the bullish momentum exhausted and we are seeing a formation of Head & Shoulder pattern on the hourly chart.

The said pattern will be activated if stock breaches and sustains below 889. In that case, the stock is likely to correct till 840 – 810 levels respectively.

The weekly Lower Top and Lower Bottom formation is intact which indicates that the trend is still down. Hence, we advocate traders to go short below 889 with a price target of 840 & 810 levels respectively. Stop loss should be placed above 927.

Disclaimer: The author Head of Technical Research, Way2Wealth Brokers Pvt. Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Nov 30, 2018 08:24 am
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